Rupert Murdoch’s News Corp are selling their shares in NZ Sky TV. What does these mean for the on-going decline of public broadcasting, and related rise of global corporate control? It will be interesting to see where the shares go. It is possibly part of the shift away from control by media moguls and towards control of news media by investment bankers.
Liam Dann reports in the NZ Herald today:
Shares expected to go on trading halt this morning as News Corp sells its 43.6 per cent stake.
Rupert Murdoch’s News Corp is understood to be selling out of New Zealand’s Sky Television.
Sky TV shares are expected to go on a trading halt this morning as the media group sells its 43.6 per cent stake into the market at a price of $4.80 – a 7 per cent discount to its $5.17 close on Friday. …
Bankers for the deal are understood to be Craigs Investment Partners and Deutsche Bank.
Market sources said yesterday that the sale had been tendered by News Corp and the investment banks were effectively underwriting the deal.
No cornerstone shareholder is expected to take a stake in excess of 19.9 per cent – a level that would require a full takeover offer to be made.
A spokesperson for Sky TV said yesterday that the company could not comment on matters relating to shareholdings.
Another substantial shareholder – the Todd family – sold its 11.11 per cent stake in Sky TV in November last year to Credit Suisse, which on-sold it to institutions and private investors.
That block of shares was sold at $5.05 a share for about $218 million.
The on market selldown of Sky TV also follows media group Fairfax’s $769 million selldown of Trade Me in December.
I’m pleased to see Murdoch’s empire struggling and that it is withdrawing from NZ.
Murdoch’s News Corp has been the dominant shareholder in Sky TV since 1999. Dann reports that the number of Sky subscribers have been pretty static over the last year, with the profit gains largely coming from subscribers spending more and subscribing to more services:
Last month Sky TV reported a 9 per cent gain in first-half profit as subscribers migrated to its MySky premium service and spent more.
Profit rose to $68.2 million in the six months ended December 31, from $62.7 million a year earlier.
Sales rose 3.9 per cent to $443 million.
Total subscribers to Sky TV’s services were little changed at 846,988 at December 31 from a year earlier, though the number on MySky climbed 28 per cent to 423,973. Average revenue per subscriber rose to $75.78 at December 31 from $71.81 a year earlier.
I’m not very knowledgeable about the way such sales of shares work, but I am concerned about the role of financial institutions in managing the share sales.
In an article in Pacific Journalism Review, Oct 2011 17.2, p188, ‘Global capital and media communication ownership in New Zealand‘, authors Wayne Hope and Merja Myllylahti outlined the increasing globalisation of NZ media ownership. They said:
In 2011, there are still four major players in the New Zealand media market: APN News & Media, Fairfax Media, MediaWorks, and News Corporation/Sky. New Zealand news media is dominated by overseas companies and these companies are primarily owned by financial institutions and a handful of foreign media moguls: Australian/Amrerican Rupert Murdoch (News Corporation), Irish Tony O’Reilly (Independent News & Media), and Australian mining billionaire Gina Rinehart …
News media have been struggling in various ways to make profits. According to Hope an Myllylahti, MediaWorks were heavily in debt in 2009, but were rescued by the involvement of several new investors including Goldman Sachs JBWere, which took a 12.9% stake in the company.
So rather than looking at the withdrawal of News Corp from Sky as a decline in corporate global control in the media, we are probably seeing a shift in the kind of players dominating the media: a shift away from the media moguls, and towards the investment bankers or financial institutions. It’ll be interesting to see the individuals and organisations that take up News Corps’ NZ Sky TV shares.
I am hoping that this won’t mean that Sky is rejuvenated so that it can once again start to recruit more subscribers, further fueling the decline in free-to-air news and other media.